In the recent case of Wilkinson v London Strategic Health Authority [2012] EWPCC 48, the Patents County Court considered the terms of a licence to pre-existing intellectual property rights (“IPR”) automatically granted when a broader copyright (containing that pre-existing IPR) was assigned. Here, the claimant, Dr Wilkinson (“DW”), produced training materials to help nurses and medical professionals communicate with ill patients. In 2007 DW signed a consultancy agreement (“Agreement”) for a project with the defendant, the London Strategic Health Authority (“LSHA”), to provide a training programme (the “Programme”). The Agreement stated that the LSHA owned all IPR resulting from performance of consultancy services under the Agreement. However in 2008 a dispute arose and the Agreement was terminated.

The LSHA subsequently sought to licence the Programme elsewhere within the UK and to institutions abroad. DW objected, arguing that her pre-existing IPR was integrated within the copyright she had assigned under the Agreement and that, because she retained the rights to the pre-existing IPR, the LSHA simply owned an implied licence to use that pre-existing IPR. Furthermore, she stated that this licence did not allow any use of the Programme other than those DW had been made aware of at the time of contracting (i.e. use by the NHS in treating cancer and ‘end of life care’) nor could it be sublicensed by the NHS to other persons (which is what occurred whenever the LSHA granted a licence to use the Programme to another). In response, the LSHA argued that the Agreement automatically assigned any existing IPR that may have later been incorporated into the Programme. The LSHA then argued that even if such rights were assigned by DW, she was nonetheless estopped from enforcing them as it would unconscionable for her to do so.

The Court held that DW’s pre-existing copyright works were not transferred, as the relevant clause relating to IPR within the Agreement was clearly designed to provide the LSHA with nothing but copyright to new works and did not address DW’s pre-existing IPR. On this basis, the LSHA had only been granted an implied licence to use DW’s pre-existing IPR. However, because the original copyright assignment did not restrict the LSHA’s right to use the Programme, the Court found that there was no reason that an implied licence should fetter this right. As a consequence, the LSHA was held to have been granted an implied assignable, irrevocable, royalty free licence from DW to use her existing works which could be sub-licensed with any licence of the Programme.

WAB comment:

In this case the claimant was held to retain copyright to existing works which were later incorporated into a new work belonging to another. In reality though, this was a victory for the defendant who was permitted to use, develop and distribute the Programme as it saw fit without limitation or having to pay royalties for such use. It was also apparent that the Court was unwilling to retrospectively imply a licence that would limit an assignment of copyright which had been left otherwise unrestricted by the terms of the contract under which it was assigned. The important lesson for copyright holders here is that wherever there is the possibility of any IPRs being involved in a new work, which are not themselves the subject of an express assignment, the terms on which those IPRs are licensed should be clearly defined within the contract.